Facebook quietly rolls out another tool for advertisers

In the midst of backlash about disappointing IPO, social media giant works to leverage its users

Facebook is working to leverage its advertising potential, with the quiet roll out of Promoted Posts for Brand Pages.
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By:New feature allows businesses to pay for posts to be more predominantly displayed on news feeds.Ashante Infantry Published on Thu May 31 2012

In the midst of a backlash about its disappointing IPO, Facebook is working to leverage its advertising potential, with the quiet roll out of Promoted Posts for Brand Pages, a new feature that allows businesses to pay for posts to be more predominantly displayed on news feeds.

“The Promoted Posts feature (only available to Page administrators) is a way to make it easier for small- and medium-sized businesses to promote their content on Facebook,” the company told Time magazine. “Page administrators will be able to promote posts via a new button on the Page composer. Promoting a post will create a sponsored story or ad that enables the post to reach more of the Page’s fans. We want to make it as simple as possible for businesses to reach fans and their friends through their Page.”

Some observers say the recent announcement from General Motors Co., the world’s biggest automaker, that it would soon stop paid display ads on Facebook due to low impact on consumer car sales, may have hurt the social networking giant’s IPO, since it could spur other marketers to reconsider ads on the site and hamper sales growth.

Promoted Posts will allow brands to pay upwards of $5 to show up in the news feeds of users who “like” their promotional page, and, when they interact with the post, to their friends. These posts will be labeled as “Sponsored” in the news feed.

Some believe this drive to generate advertising could turn off traditional users, marking the end of Facebook. Others think it’s a way the site might start to actually monetize its traffic. And everyone wonders if consumers will like it or hate it.

“I think that users will be even less inclined to click like on a page, because our friend feed is turning into just another stream of advertisement,” said Queen’s University media professor Sidneyeve Matrix. “We’re losing our friends updates and were getting updates from all kinds of brands.

If the site evolves from a business designed for “connecting friends” to an overt platform for brands, users may begin turning off their news feeds manually, she said.

“I’m noticing research that’s saying that the numbers of young people who are clicking ‘like’ on brands are really low, especially for guys,” Matrix said.

“As it stands now, everybody’s pretty used to it: most of the content is in the middle, the ads are sponsored, and they’re all kind of in a column on the right,” he said.

“The chances of somebody actually clicking on them are small, but if there’s one that’s customized based on the stuff that you like and you’re willing, you do it. Clearly the model works. If they’re reporting millions and millions of dollars in revenue that means people are clicking through.”

The advertising ramp up was inevitable with Facebook’s recent IPO, said Bontis.

“The revenue projections that have to be met given the outrageously high valuation that the stock received will not be met with pc-based click throughs,” because the preponderance of Facebook access five to 10 years out is going to be smartphone, not pc-based,” he explained. “And we know that smartphone-based users do not click on the banner ads on Facebook to the same degree that they do on the pc,” because data charges make them selective.

That means inveigling mobile users via newsfeed links.

And don’t discount the appeal of the visual, added Matrix.

“The Promoted Posts that gain the most click throughs will be those that work with the way we use Facebook already which is about having enchanting images that we want to click through and see more.” She said. “The Promoted Posts that grow long legs the fastest will be those that have four furry legs, like a kitty.”

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